Funding Increases for Private Schools in Victoria Have Far Outstripped Those for Public Schools

Funding Increases for Private Schools in Victoria Have Far Outstripped Those for Public Schools

Wednesday March 14, 2018

New figures show that funding increases for private schools in Victoria far outstripped that for public schools under the Gonski 1.0 funding plan. This was due to bigger increases in Commonwealth funding for private schools and cuts to public school funding by the previous Victorian Government. Funding for public schools was slashed by the Baillieu and Napthine Coalition Governments while a small increase occurred in the first year of the Andrews Labor Government.

The Turnbull Government’s Gonski 2.0 funding plan will ensure that Catholic and Independent schools are funded at or above their resource entitlement while public schools will be vastly under-funded unless the Victorian Government embarks on a major funding effort.

1. Funding increases for private schools have far outstripped those for public schools
New figures show that total government funding (Commonwealth and state/territory) for private schools in Victoria increased by $424 per student, adjusted for inflation, between 2012-13 and 2015-16 [see Chart 1 below]. Over the same period (which includes the first 2½ years of Gonski funding), funding for public schools increased by $132 per student. In percentage terms, the increase for private schools was 4.7% compared to 1.1% for public schools [Chart A1].

Public schools experienced a massive cut in funding under the Baillieu and Napthine Governments. Between 2009-10 and 2015-16, Victorian Government funding for public schools was cut by $1,053 per student [Chart 2]. However, the cut during the period of the Coalition Government was even larger – funding fell by $1,356 per student between 2009-10 and 2014-15. Funding increased in the first year of the Andrews Government by $303 per student.

Despite agreeing to increase funding for public school under the original Gonski 1.0 funding plan, the Napthine Government cut funding by $527 per student between 2012-13 and 2014-15. It was aided in this by the decision of the Abbott Government on taking office to release state and territory governments from commitments made under Gonski 1.0.

In contrast to the cuts by the Victorian Coalition Government, the Commonwealth increased funding for public schools by $553 per student between 2009-10 and 2015-16. Under Gonski 1.0, the Commonwealth increased funding by $356 per student between 2012-13 and 2015-16. This was a significant increase over the earlier period which saw an increase of $197 per student. However, these increases were far outweighed by the massive cuts by the Victorian Government.

Over the whole period from 2009-10 to 2015-16, total government funding for public schools was cut by $500 per student while funding for private schools increased by $1,066 per student. In percentage terms, funding for public schools was cut by 4.1% while funding for private schools increased by 12.7% [Chart A2]. The increase for private schools was mainly due to a large increase in Commonwealth funding of $997 per student. Commonwealth funding for private schools increased by much more than for public schools in both periods. Under Gonski 1.0, it increased for private schools by $614 per student compared to $356 per student in public schools. In contrast, Victorian Government funding for private schools was cut by $189 per student in this period, after increasing by $258 per student in the earlier period.

2. Public schools will remain under-funded under Gonski 2.0
There is a strong likelihood that Victorian public schools will remain significantly under-funded under the Turnbull Government’s Gonski 2.0 funding plan while Catholic and Independent schools will be funded at their entitlement.

Under the Gonski 2.0 funding plan, future funding increases for public schools are largely left to state/territory governments. It caps Commonwealth funding of public schools at 20% of their Schooling Resource Standard (SRS), but Victorian Government funding is well below 80% of the SRS.

In 2018, Commonwealth funding of Victorian public schools is 17% of their SRS and is due to increase to 20% by 2027. However, Victorian Government funding for public schools was only 66% of their SRS in 2017 (the 2018 figure is not available). Unless the Victorian Government increases its funding share, public schools will be funded at only 86% of their SRS by 2027. This will mean under-funding by hundreds of millions of dollars.

In contrast, private schools will be funded at around 100% of their SRS. Catholic schools are currently funded at just on 80% of their SRS by the Commonwealth and just over 20% of their SRS by the Victorian Government. They are guaranteed to be at 100% of their SRS in 2027 unless the Victorian Government makes further cuts to their funding.

Independent schools are currently funded at 72% of their SRS by the Commonwealth and this will increase to 80% by 2027. Victorian Government funding is at 21% of their SRS. Thus, Independent schools will be funded at about 100% of their SRS by 2027 unless the Victorian Government makes further cuts to their funding.

However, these figures disguise the fact that many Independent schools will be over-funded under Gonski 2.0 because they are funded at above 20% of their SRS by the Victorian Government. In 2017, 20% of Independent systems and schools were funded at over 100% of their SRS. This will increase to 45% by 2027 and the number over-funded will increase from 33 to 74 unless there is a change in Victorian Government funding policy. They include some of the most elite schools in the state such as Christ Church Grammar, MLC, St. Catherine’s, Lauriston, St. Michael’s Grammar, Melbourne Grammar and Scotch College.

The challenge for the Victorian Government is to ensure that school funding in the state is fully distributed according to need in the future. This requires increasing the state share of funding for public schools to 80% of their SRS and removing over-funding of private schools. The importance of such a change in funding policy is to increase the proportion of disadvantaged students in Victoria who achieve a Year 12 education and reduce the large achievement gaps between advantaged and disadvantaged students.

Trevor Cobbold

Charts on School Funding in Victoria 2009.pdf
 
Data issues and sources
The funding data used here is drawn from the latest Report on Government Services (ROGS), but the figures here differ from those published in the report in two ways. First, the figures here exclude book entry items (user cost of capital, depreciation) and other items (payroll tax, school transport) which are included in state/territory government funding of public schools. These items are not included in funding figures for private schools published in ROGS and, as a result, funding public schools is over-estimated in comparison with private schools. These items are excluded from the funding figures for public schools published on the My School website on the advice of the accounting firm Deloitte Australia.

These items accounted for 30% of total current Victorian Government funding of public schools in 2015-16 and accounted for 47% of the current dollar increase in between 2009-10 and 2015-16. Inclusion of these items therefore substantially over-estimates the actual funding of public schools.

Second, ROGS uses the General Government Final Consumption Expenditure, Chain price Index (GGFCE) to adjust current dollar figures for inflation. However, this price index does not distinguish between different rates of cost increase in different areas of public service provision. Instead, the Wage Price Index for Public and Private Education and Training is used here to deflate nominal funding figures. This price index increased by more than the GGFCE between 2009-10 and 2015-16, indicating a higher cost increase. The GGFCE increased by 13 percentage points compared to an increase of 17.3 points on the Wage Price Index. The ROGS method of adjusting for inflation under-estimates increasing costs for schools and, therefore, over-estimates the actual increase in real resources available to schools.